After seven years of holding a stake in Dutch semiconductor equipment maker ASML, Samsung Electronics has decided to sell some of it. The move was interpreted as an effort to raise funds for the investment, especially as the company’s operating profit is close to a loss this year.
According to Samsung Electronics’ semi-annual report released on August 15, the company’s stake in ASML decreased by 3,547,715 shares from 6,297,787 shares in the first quarter to 2,750,072 shares in the second quarter. As a result, Samsung Electronics’ stake in ASML fell from 1.6 percent to 0.7 percent. The book value (market value) of the holdings fell from about 5.59 trillion won to 2.6 trillion won.
Samsung Electronics sold some of its ASML stake in the second quarter. Taking into account ASML’s recent stock price, it is estimated that Samsung has earned about $2.2 billion in revenue from this sale.
In addition, in the second quarter, Samsung Electronics divested 2.38 million shares (0.1 percent) of Chinese electric car maker BYD and 1.544 million shares of South Korean conglomerate SFA, possibly gaining investment capacity of about 150 billion won.
In order to establish a strategic cooperation with ASML, Samsung Electronics acquired a 3.0% stake (12,595,575 shares) in 2012 for 36.3 billion won in ASML, the only company in the world that produces extreme ultraviolet (EUV) lithography equipment. By the third quarter of 2016, Samsung Electronics had sold about half of its stake, about 1.4%, worth 750 billion won.
From the perspective of return on investment, Samsung Electronics has made a lot of money. The stake sold this time alone earned a profit equivalent to nearly ten times the initial investment in 2012.
The stake sale is seen as a move by Samsung to raise funds for semiconductor investments. Despite the slowdown in the global economy, Samsung Electronics continues to increase investment to enhance future competitiveness. One trillion won (currently about 126.698 billion CNY) can be seen.